- The Washington Times - Sunday, July 17, 2005

CALANG, Indonesia - Mike Gray, 54, spends most days as Rolls-Royce’s regional director selling jet engines to the Indonesian military or compression systems to oil companies across this country’s vast archipelago.

But ever since the tsunami, the Briton has assumed a new role: spurring corporate relief efforts.

Mr. Gray isn’t alone. The Dec. 26 tsunami inspired unprecedented corporate involvement in humanitarian relief after a natural disaster. Eager to respond to the crisis — and bolster their credentials as good corporate citizens — dozens of Fortune 500 companies joined aid groups on the ground within weeks of the disaster that killed about 180,000 people in 11 countries.

Days after the disaster, Mr. Gray chartered an 800-ton ferry to deliver masks, body bags and gloves to the Indonesian military along the tsunami-ravaged west coast of Sumatra — all at Rolls-Royce’s expense.

He then approached the London-based bank HSBC Holdings with a proposal to build a $500,000 clinic here in Calang, a coastal town.

“When he said half a million dollars, I almost gasped,” said Richard McHowat, the bank’s chief in Indonesia. “I said, ‘Mike, we’re going to struggle to put that kind of money together.’”

The state-of-the-art primary care clinic was completed nine weeks later.

Today, the compound with bright, white walls stands out against the tent camps and wood shacks that dot Celang, which lost nearly 90 percent of its 7,000 residents in the Dec. 26 disaster. HSBC funded the clinic’s construction, Jakarta-based Global Assistance and Healthcare designed it, and Rolls-Royce has agreed to pay operating costs for a year.

Examples of corporate relief work abound.

General Electric Co. shipped a water-treatment plant to Aceh, while Intel Corp. and several other companies are planning to wire the battered city of Banda Aceh. Even an online casino got into the act by donating fishing boats in Sri Lanka.

Those efforts, say corporations and their boosters, prove the private sector can play a greater role in areas traditionally dominated by governments and relief groups.

Businesses in the tsunami zones have demonstrated speed and efficiency as well as technical expertise that aid groups sometimes lack in situations like that in Aceh, where villages, roads and bridges were destroyed.

“The ability to react quickly in any disaster situation, but particularly in this one, which is spread out over such a large geographical area, is exceptionally important,” said Erskine Bowles, former President Clinton’s deputy in his role as special U.N. envoy for tsunami recovery.

“It shouldn’t be viewed as competition, but as another resource that has to be coordinated to be effectively used,” Mr. Bowles said.

The aid community appears divided about the corporations’ role. The United Nations has embraced the private sector as a partner in the tsunami relief, but some aid groups say the job should be left to specialists.

The critics say too many companies are inexperienced and rush to finish a job, leaving behind projects that are inappropriate or of little use to villagers.

In the Indonesian village of Lamreh, for example, a German cigar company donated a water-filtration system. But a dispute between the villagers over the cost of the drinking water has left it sitting idle.

“It’s all very well to come in quickly and build hard infrastructure,” said Kim Tan, a spokesman for the British charity Oxfam. “But it’s not just about building schools and clinics. You have to pay the teachers, the doctors. The history of aid is littered with projects that didn’t have long-term sustainability.”

More than 400 U.S. companies gave $528 million for tsunami relief, according to the Center for Corporate Citizenship of the U.S. Chamber of Commerce, and many of them were first-time givers to disaster relief.

The numbers fall short of the more than $721 million given by American companies after the September 11 terrorist attacks, but surpasses the previous record for a corporate response to a natural disaster — $70 million for Hurricane Mitch in 1998.

The historic outpouring was driven both by the disaster’s scope and its occurrence over the Christmas holidays. But it also provided companies an opportunity to burnish their image and build employee morale.

“We think this is good for business,” said Mr. McHowat of HSBC, whose bank also donated money for six boats in Aceh and sent 30 employees to help rebuild a school.

“People will make a decision where they buy their engines, where they choose to bank and what shampoo they buy based on ethics and how this company behaves,” he said. “I’ve never heard a shareholder say all this activity is damaging profits and the share price.”

Most companies gave cash to international aid agencies or governments, giving them flexibility on spending it and the companies a tax write-off. Others donated goods — everything from powdered milk to backhoes to computers.

But some companies took relief a step further, wanting in part to account for donations, especially in historically corrupt countries such as Indonesia. They sent employees into the disaster zone, teamed up with the United Nations and local governments on training projects and started “Adopt a Village” initiatives.

“This is the first time you are really seeing a surge in manpower,” said Alesandra Roccasalvo, the U.N. Development Program Business Partnership specialist in Jakarta.

FedEx Corp. shipped 640 tons of medicine, supplies and water systems for aid groups in the days after the tsunami, while accounting firms PricewaterhouseCoopers and Deloitte & Touche are working with the United Nations to protect tsunami donations.

General Electric considered donating water-purification equipment to aid groups, but gave up after they couldn’t get a straight answer where it would go in Aceh.

Instead, it flew a water-treatment plant from Dubai to Singapore and then shipped it by barge and then truck to Aceh. The company — along with CH2M Hill — ran the plant until April and handed it to UNICEF, which is operating it with a local company.

Phillips Foods Inc., a Baltimore-based seafood company, said it donated 20 boats to fishermen in three countries.

“We are dealing with the fishermen every day,” said Alex Thomas, managing director of Philips Food India. “We felt this would be great opportunity to participate in their sorrow and help them in any way we could.”

Then there was Mr. Gray, the Rolls-Royce executive. At the request of the British Embassy in Jakarta, he shipped masks and body bags and other supplies to Aceh, using his business contacts to make it happen.

Mr. Gray’s idea to build a clinic came after he realized that many military field hospitals would close. He said some aid groups dismissed his plans as unrealistic, and medical aid groups refused to participate because he was working with the Indonesian military, which is fighting separatist rebels in the area.

But Mr. Gray makes no apologies, saying he couldn’t have done the job without help from the troops.

“We needed something that would transcend the emergency to permanent rehabilitation and would become a focal point of the redevelopment of Calang,” he said.

The aid efforts of Mr. Gray and Mr. McHowat may not be over. Like two excited schoolboys, they sat in an airport waiting room tossing around ideas. Maybe the clinic could be expanded into a hospital, or they could help the devastated fishing industry in Calang by providing larger vessels.

“The tsunami has broken the mold,” Mr. Gray said. “It provides us an opportunity to see what we can do on the ground. We’re just at the beginning.”

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